As the friendly article points out, the "AI is a bubble" hypothesis and "entry level hiring is collapsing because AI is replacing their jobs" hypothesis are not really compatible.

As always, reality is likely a muddled mix: there is real utility and there is wasted investment that will never pay itself back.

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tsimionescu an hour ago | parent | next [-]

They actually are compatible, because the idea of replacing workers with AI in large numbers isn't compatible with the kind of economic growth these valuations are predicated on. We are not living in pre-industrial revolution times, where most people are wasting huge human effort on food growth and physical tasks, having room to move into more white collar jobs.

So, if you have massive unemployment because AI really is cheaper than labor, you'll get a massive reduction in revenue for virtually every industry, collapsing all of these valuations. Even for B2B companies, Google isn't going to be making much money selling ads to unemployed people who can't afford to buy anything.

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jayd16 3 hours ago | parent | prev [-]

They're compatible because they are both driven by hype, not reality.

	▲	ahartmetz an hour ago \| parent [-]
		And because of massive overhiring. In that scenario, the sequence of events is: Cheap money (ZIRP), companies hiring developers just to deny them to the competition (there were reports) or for empire building or as a signal to investors (etc), AI and nonzero interest rates come around, need to spend billions on AI with limited money -> lay off overhired developers and say it's because AI replaces them. It's great for companies because it allows to admit no mistake regarding the overhiring and claim to be fully in on the current thing. Simple enough, no?